Dark Roast Java
Financial Plan
Forecast
Key Assumptions
Our key assumptions are:
- The 20-year record of positive growth for specialty coffee drinking will continue at a healthy rate. The Specialty Coffee Association says that the market is far from saturation and will not reach maturity until at least 2019.
- The resilience of the coffeehouse industry to negative national and world events will continue. Despite recession and war the coffeehouse industry has shown strong growth every year for the past two decades.
- The quality of national chains will remain the same or decline slightly rather than improve as they standardize their stores, increase automation of espresso drinks and mass-produce the roasting process.
- Coffee drinks will continue to be considered an "affordable luxury."
- 15% minimum sales growth rate over the next three years as Dark Roast Java becomes well known.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Start-up expenses are in line with those of other coffeehouse chains. For example, Starbucks spends approximately $380,000 on average to build-out a new store location. Our costs are an estimated $225,000 and $25,000 for opening inventory and operating capital. Future stores should cost no more than $175,000 to build out since many of the costs incurred here will not have to be repeated later.
The Start-up requirements, below, include $77,000 of short and long-term assets.
Long term assets: $62,000
Undercounter Refrigerators $5,000
Service/Prep Counter
$12,000
Ice Machine $3,500
Large Refrigerator $1,000
Milk Coolers (3) $1,000
Cash register (2) Point of Sale System $14,000
Espresso Machine $11,000
Fetco Coffee Brewer $2,500
Counters/Condiment bar/shelving $12,000
Short-term assets: $15,000
Tables, Chairs, Furnishings $12,000
Persian Carpet $1,000
Lighting Fixtures $2,000
Site design, architectural plan $10,000
Demolition/Construction $25,000
Electrical, Lighting $12,000
Electrical, Other $10,000
Flooring/installation $5,000
Bathroom Construction $4,000
Plumbing $10,000
Fireplace Construction $5,000
Painting $2,500
City permits/licenses/fees $6,500
Accounting $2,000
Legal $4,000
Insurance$2,500
Opening marketing/advertising $3,000
Graphic design for signage, menu boards $2,000
Outside Signage $1,500
Office equipment $600
Computer, scanner, printer $2,000
Telephones/Fax/DSL $500
Stationery etc.$1,000
Gift item displays (3)$1,500
Preparation equipment $1,000
Dishwasher $3,500
Blenders (3) $2,000
Microwave $500
Panini maker $700
Storage racks $1,000
Music system $800
Food display case $6,000
Storage room shelving $1,000
Bulk bean grinder $700
Sinks (2), prep counters $1,200
Menu board construction $2,500
Cups/Lids (50,000) $14,000
TOTAL START-UP EXPENSES $147,000
Start-up Inventory $25,000
Other Current Assets $15,000
Long-term Assets $62,000
TOTAL ASSETS $103,500
Total Requirements $250,500
Sources of Funds
We will be getting investors to give us a total of $250,000.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $744,128 | $974,067 | $1,207,445 |
| Direct Costs | $299,497 | $380,540 | $449,440 |
| Gross Margin | $444,631 | $593,527 | $758,005 |
| Gross Margin % | 60% | 61% | 63% |
| Operating Expenses | |||
| Salaries & Wages | $267,200 | $381,888 | $469,983 |
| Employee Related Expenses | $31,160 | $43,574 | $54,046 |
| Rent | $45,600 | $45,600 | $45,600 |
| Utilities | $9,600 | $9,600 | $9,600 |
| Insurance | $2,400 | $2,400 | $2,400 |
| Legal/Accounting | $6,000 | $6,000 | $6,000 |
| Marketing | $1,800 | $1,800 | $1,800 |
| Sales | $4,800 | $4,800 | $4,800 |
| Maintenance | $9,600 | $9,600 | $9,600 |
| Cleaning | $10,800 | $10,800 | $10,800 |
| Training | $8,400 | $8,400 | $8,400 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $397,360 | $524,462 | $623,029 |
| Operating Income | $47,271 | $69,064 | $134,977 |
| Interest Incurred | |||
| Depreciation and Amortization | $6,000 | $6,000 | $6,000 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $6,191 | $9,459 | $19,347 |
| Total Expenses | $709,048 | $920,462 | $1,097,815 |
| Net Profit | $35,080 | $53,605 | $109,630 |
| Net Profit/Sales | 5% | 6% | 9% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $13,343 | $58,194 | $111,175 | $230,022 |
| Accounts Receivable | $0 | $0 | $0 | |
| Inventory | $25,500 | $31,712 | $37,453 | $37,453 |
| Other Current Assets | $15,000 | $15,000 | $15,000 | $15,000 |
| Total Current Assets | $53,843 | $104,906 | $163,628 | $282,475 |
| Long-Term Assets | $60,000 | $60,000 | $60,000 | $60,000 |
| Accumulated Depreciation | ($6,000) | ($12,000) | ($18,000) | |
| Total Long-Term Assets | $60,000 | $54,000 | $48,000 | $42,000 |
| Total Assets | $113,843 | $158,906 | $211,628 | $324,475 |
| Accounts Payable | $10,343 | $16,113 | $17,078 | $17,824 |
| Income Taxes Payable | $4,213 | $2,365 | $4,836 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | ||||
| Prepaid Revenue | ||||
| Total Current Liabilities | $10,343 | $20,326 | $19,443 | $22,660 |
| Long-Term Debt | ||||
| Long-Term Liabilities | ||||
| Total Liabilities | $10,343 | $20,326 | $19,443 | $22,660 |
| Paid-In Capital | $250,500 | $250,500 | $250,500 | $250,500 |
| Retained Earnings | ($147,000) | ($147,000) | ($111,920) | ($58,315) |
| Earnings | $35,080 | $53,606 | $109,629 | |
| Total Owner’s Equity | $103,500 | $138,580 | $192,185 | $301,815 |
| Total Liabilities & Equity | $113,843 | $158,906 | $211,628 | $324,475 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $35,080 | $53,605 | $109,630 |
| Depreciation & Amortization | $6,000 | $6,000 | $6,000 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($6,212) | ($5,741) | $0 |
| Change in Accounts Payable | $5,770 | $964 | $746 |
| Change in Income Tax Payable | $4,213 | ($1,848) | $2,471 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $44,851 | $52,981 | $118,847 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | |||
| Change in Long-Term Debt | |||
| Net Cash from Financing | |||
| Cash at Beginning of Period | $13,343 | $58,194 | $111,175 |
| Net Change in Cash | $44,851 | $52,981 | $118,847 |
| Cash at End of Period | $58,194 | $111,175 | $230,022 |
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